Student Loan Consolidation/Refinance 101

Student Loan Consolidation/Refinance 101

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Agenda

Basics of Student Loan Consolidation/Refinance Key Differences Between Federal and Private

Student Loan Consolidation Overview of Maine's New Refinance Student

Loan Insurance Program Financial Education & Responsible Borrowing FAME Student Loan Specialists

Federal vs. Private Federal Loan Consolidation

Federal Direct Consolidation Loan

? Combining multiple federal education loans into a single loan resulting in one monthly payment

? Private student loans are not eligible ? Defaulted loans can be consolidated if certain

requirements are met before consolidation ? Interest rate is fixed based on the weighted average

of the interest rates of the loans being consolidated, rounded up to the nearest one-eighth of 1%

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Federal vs. Private Federal Loan Consolidation

Repayment begins after the loan is disbursed Repayment terms range from 10 to 30 years,

depending on the loan amount, other education loan debt, and the repayment plan selected Borrower benefits offered with the original loans such as interest rate discounts, principal rebates, and some loan cancellation benefits may be lost with consolidation

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Federal vs. Private Federal Loan Consolidation

Federal loans eligible for consolidation include:

? Direct Subsidized & Unsubsidized Loans ? Subsidized & Unsubsidized Federal Stafford Loans ? Direct PLUS Loans ? Federal Family Education Loan (FFEL) Program PLUS

Loans ? Supplemental Loans for Students (SLS) ? Federal Perkins Loans ? Federal Nursing Loans ? Health Education Assistance Loans ? Some existing federal consolidation loans

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